Correlation Between BH Global and SIM Technology
Can any of the company-specific risk be diversified away by investing in both BH Global and SIM Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BH Global and SIM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BH Global and SIM Technology Group, you can compare the effects of market volatilities on BH Global and SIM Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BH Global with a short position of SIM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BH Global and SIM Technology.
Diversification Opportunities for BH Global and SIM Technology
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 911608 and SIM is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BH Global and SIM Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIM Technology Group and BH Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BH Global are associated (or correlated) with SIM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIM Technology Group has no effect on the direction of BH Global i.e., BH Global and SIM Technology go up and down completely randomly.
Pair Corralation between BH Global and SIM Technology
Assuming the 90 days trading horizon BH Global is expected to under-perform the SIM Technology. But the stock apears to be less risky and, when comparing its historical volatility, BH Global is 1.35 times less risky than SIM Technology. The stock trades about -0.06 of its potential returns per unit of risk. The SIM Technology Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 301.00 in SIM Technology Group on September 4, 2024 and sell it today you would earn a total of 12.00 from holding SIM Technology Group or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BH Global vs. SIM Technology Group
Performance |
| Timeline |
| BH Global |
| SIM Technology Group |
BH Global and SIM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BH Global and SIM Technology
The main advantage of trading using opposite BH Global and SIM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Global position performs unexpectedly, SIM Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SIM Technology will offset losses from the drop in SIM Technology's long position.| BH Global vs. Eclat Textile Co | BH Global vs. WiseChip Semiconductor | BH Global vs. Novatek Microelectronics Corp | BH Global vs. Leader Electronics |
| SIM Technology vs. Accton Technology Corp | SIM Technology vs. Wistron NeWeb Corp | SIM Technology vs. Alpha Networks | SIM Technology vs. Gemtek Technology Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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